IPO shelved, Wockhardt now turns to PEs for funds

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Bangalore: Wockhardt Hospitals is resorting to alternative options for fund raising after shelving its IPO plan. The hospital has turned to private equity (PE) majors for raising up to $150 million. The company has reportedly held early-stage talks with several funds, like AIG, 3i, Actis and Carlyle, reported The Economic Times. It is learnt that Wockhardt is seeking a valuation closer to the lower price band of the dropped IPO - around Rs 225 per share. But the funds are expected to drive a hard bargain with some of them already indicating a discount pricing in the initial discussions, sources said. Depending on the valuation, the hospital chain plans to raise around $100 million to $150 million through placement. The company is also exploring the option of debt while hoping to resurrect the IPO later. The promoters may not like to dilute twice, that too if the valuation is not matching their expectations, said a banking source. Commenting on the issue, Wockhardt Hospitals chairman Habil Khorakiwala said, "We are looking at raising funds through several routes, with PE being one of the options." While some of the funds confirmed looking at the proposal, others like 3i said it was not in talks. According to the sources, the company may currently be holding talks with four to five funds. Wockhardt was planning to raise between Rs 688 crore and Rs 762 crore through IPO within a price band of Rs 280 to 310 per share, but lowered the price band to Rs 225 to 260 on the eve of the public offering.